Poland builds most new homes in four decades

Almost 222,000 homes were delivered for use in Poland last year. That is the highest number since the late 1970s, when the communist-era government led a construction boom to house a growing population.

However, the number of homes sold last year fell, in part due to rising house prices, which increased at the second fastest rate in Europe.

According to official data from Statistics Poland (GUS), a state agency, last year 221,978 homes were put into service. This marks a rise from 207,400 in 2019 and the highest figure since 1979.

In the 1970s, under communist leader Edward Gierek, the government was seeking to meet the needs of a demographic boom. Poland’s current building spree, however, comes amid a decline in births, which last year fell to their lowest level in 15 years.

Newly built dwellings are also larger today than during the communist era. Back then, the average new home was around 60 square metres, according to Bartosz Turek, chief analyst at HRE Investments. Now they are around 50% larger, Turek told Business Insider Polska.

Over the past decade, a total of 1.68 million new homes have been built in Poland. Their total stock has now surpassed an estimated 15 million, according to Stockwatch.pl.

And developers show no signs of slowing down. The number of construction permits issued in December was 72% higher than in the previous year and 56% higher than the November figure. Over 2020 as a whole, permits were up 3% on the previous year, reports Business Insider.

According to analysts at PKO BP, Poland’s largest bank, the high numbers of apartments delivered for use are likely to continue into 2021, with an estimated annual figure of 200,000 this year.

However, they also note a slowdown in the number of started projects – only 8% higher this year – which “may mean a slower increase in production in the coming years”.

Yet, while more homes are being built, the number of sales has been falling. In the six top Polish cities for real estate sales, a total of 53,000 dwellings were sold last year, which is 19% less than in 2019.

This has not, however, resulted in a drop in house prices, which grew by 11% year on year in the third quarter of 2020. Low interest rates and high inflation have made real estate a more enticing investment.

Main image credit: PxHere (under public domain)

Maria Wilczek

Maria Wilczek is deputy editor of Notes from Poland. She is a regular writer for The Times, The Economist and Al Jazeera English, and has also featured in Foreign Policy, Politico Europe, The Spectator and Gazeta Wyborcza.